FCA confirms new measures to protect customers

May 2021


FCA confirms measures to protect customers from harm in home and motor insurance markets

The FCA has today (28th May) released its Policy Statement PS21/5: General insurance pricing practices market study which implements a package of remedies to improve competition and protect home and motor insurance customers.  The remedies include removing the ability to create different prices at renewal when compared with the price for a new customer (the so-called ‘loyalty penalties’ and ‘price-walking’).  This will stop the use of sophisticated processes to target higher prices at customers who firms think will not switch in the future and will therefore pay more.

In addition to the new rules on pricing for home and motor insurance, the FCA is also bringing in new rules to:

The pricing, auto-renewal and data reporting remedies come into effect on 1 January 2022. The rules on systems and controls, product governance and premium finance take effect from the end of September 2021.

Alongside today’s Policy Statement, the FCA has also published a consumer-facing Infographic covering the intended outcome of the measures, and has published research on how incentives affect consumers’ choices, focusing on purchases of motor and home insurance made through price comparison websites. The research was undertaken to inform the FCA’s approach to the new pricing rules.

The FCA will continue to monitor the market closely to ensure firms are ready to implement the pricing changes on time. The FCA will also review the effects of the remedies over the course of 2022, ahead of a full evaluation in early 2024.


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